The paper relies on economic theory to surface two key costs affected by blockchain technology: the cost of verification of transaction attributes, and the cost of bootstrapping and operating a digital marketplace without the need for a traditional intermediary. When combined with a native token (as in Bitcoin and Ethereum), a blockchain allows a decentralized network of economic agents to agree, at regular intervals, about the true state of shared data.

This shared data can represent exchanges of currency, intellectual property, equity, information or other types of contracts and digital assets – making blockchain a general purpose technology that can be used to trade scarce, digital property rights and create novel types of digital platforms. The resulting marketplaces are characterized by increased competition, lower barriers to entry and innovation, lower privacy and censorship risk, and allow participants within the same ecosystem to make investments to support and operate shared infrastructure without assigning market power to a platform operator. – Christian Catalin